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if you want to sell stuff in general then a peddlars licence is a great option. it costs £12.50 and you go into your local police station, fill in a form and it gets sent to you a week later.
this entitles you to legally sell handicrafts etc on a little stall on the streets, providing you're meeting local bylaws about not blocking throughfare etc. it covers the whole of the uk for a year.
i dont think you can use it inside festivals, but for things like street festivals, carnivals, etc its great. its also great wherever there are big gatherings of people, for example, when the carling weekend is on, reading town centre is absoloutly packed and you'd do really well selling there.
likewise for winchester hat fair, brighton fringe festival, sailsbury festival etc. just check them out on the net.
if you want to have a stall in the main area of a festival then you need alot of money to begin with because it is generally a good idea to have loads of stock. people wont come over if you only have a few things on display. then you have to pay to have the stall there. how much you pay and how far in advance varies from festival to festival. the cut off date for booking at glastonbury was jan 10th.
you can sometimes get away with paying for a ticket into the festival then setting up on the floor somewhere inside the festival. again, it depends on the festival as to whether or not you get away with it.
whatever you decide to do - good luck and hope it all works out for you!
peace and love